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Margaret Thatcher (1925–2013)

Margaret Thatcher was made by her era more than she made it.

(Loki Muthu / Jacobin)

Margaret Thatcher was a towering figure of the late twentieth century. A generation after her fall from power, she remains an extraordinarily divisive figure. For some, she freed the individual to rise up and prosper without shame. For others, she worshiped greed and with callous zeal destroyed traditional working-class communities. But no one doubts the impression she made on the tone and texture of British politics and her significance as an international actor in the closing stages of the Cold War.

As a female leader of a great power in the democratic age, she was a path-breaker. In her cultivated style she was something like her nation’s no-nonsense maiden aunt: strict but concerned; realistic but nostalgic; dismissive of airy notions but possessed of a highly acute intelligence; practical but fiercely committed to ideals.

The greater claims that will be made for her, that she defeated trade union power and consigned socialism to the dustbin of history, are overstated. The social and economic consequences of deindustrialization that transformed Britain in the 1980s were set in motion before she was Prime Minister and would have taken place in one form or other without her, as they did in other advanced countries whether under conservative, liberal, or social-democratic administration. But only in Britain could the rise of neoliberalism and property-owning democracy be seen as a kind of return to the country’s most glorious age — the Victorian era, when Britannia ruled the world’s waves and commerce.

Thatcher thought of herself as a product of this superior form of society. In these “good old days,” “self-help” ruled and redistribution from the thrifty to the feckless and was scorned as debilitation and theft. As she said in an interview:

We were taught to work jolly hard. We were taught to prove yourself; we were taught self-reliance; we were taught to live within our income. You were taught that cleanliness is next to godliness. You were taught self-respect. You were taught always to give a hand to your neighbour. You were taught tremendous pride in your country. All of these things are Victorian values. They are also perennial values.

Born in 1925, Margaret Hilda Roberts came from a petty bourgeois, religiously non-conformist, and traditionally Liberal family. With the rise of the Labour Party after the First World War, defenders of property and hierarchy coalesced around the Conservative Party, stripping Liberals of much of its historic support. But Thatcher inherited from her family’s Liberal past a distaste for unearned income and privilege, and a suspicion of patrician “wets” from traditional ruling elites too lazy or comfortable to govern with a firm hand.

Margaret graduated from Oxford in 1947 in chemistry, a subject that suited her forensic cast of mind. Though never one for abstract theorizing, she often recalled her encounter with Hayek’s 1944 polemic, The Road to Serfdom. Hayek’s Manichean worldview insisted that only free-market capitalism or totalitarianism were stable social formations. Social democracy only opened the way to the creeping suffocation of individual initiative by the state. Individual liberty and social equality stood at odds. During the post-war welfare and full-employment consensus, Hayek was hardly a guide to practical politics, but his work’s long-term appeal to Thatcher was in its simplifying clarity.

After a short time in industry (where she allegedly helped develop soft serve ice cream), Margaret married the rich businessman Denis Thatcher and became a mother. In 1959 she was elected to Parliament for Finchley. She was soon promoted to the lower regions of the “front bench” of the Conservative government and, after Labour’s election’s victory in 1964, the opposition. Labour at this time was attempting to deal with a tightening labour market that pushed up wages and cut profit margins. Its imposition of price and wage controls, and increased taxes on upper brackets, was characteristically condemned by Thatcher as inclining “not only towards socialism, but towards communism.”

Thatcher was appointed Education Secretary when the Conservatives won power under Edward Heath in 1970. Heath had promised an unleashing of the market to discipline workers and force management to take firmer control of their companies. Heath opted for a strategy of exposing the increasingly sclerotic British economy to the revivifying shock of direct competition by plunging it into the free-trade European Economic Community. But domestic crises intensified. Pummeled by the oil shock, rising inflation, and industrial militancy, Heath took on the powerful National Union of Mineworkers in 1973 and lost. Labour returned in 1974 with a narrow majority.

Wracked by industrial unrest, with weak governments and turmoil in Northern Ireland, the United Kingdom, it was feared, was suffering a “crisis of governability.” Parliamentary sovereignty seemed short-circuited by cosy trilateral deals between government, trade union “barons,” and big business. Escalating inflation encouraged workers to demand nominally high pay claims, and management to concede them in the expectation that their real value would be whittled away by rising prices. A wage-price spiral took hold. Middle-class savers saw their money depreciate, and taxes rose to finance government Band-Aid intervention.

The British electorate was increasingly disillusioned by the politics of soft-corporatism, and the Conservatives saw their chance. Thatcher’s mentor, Keith Joseph MP, decried the consensus of welfarism and full employment policies pursued by both Labour and Tory post-war governments as sapping personal responsibility and energy. He argued that there was now an opportunity to turn the tide, and resume the “embourgeoisement” of society that he believed had characterized nineteenth-century Britain. Thatcher agreed, insisting that being middle class “has never been simply a matter of income, but a whole attitude to life, a will to take responsibility for oneself.” In 1975, she was elected leader of the Conservative Party, as champion of the backbenchers and rank and file more than the party’s elite.

Thatcher had particular contempt for the academic discipline of sociology mushrooming in 1970s universities, which categorized people by class and insisted their aspirations were in conflict with one another. Thatcher’s vision of a “classless society” was one of just rewards: hard work and talent should be rewarded, indolence and ignorance penalized. Only the market was capable of measure virtues. The duty of the state was to get out of the way.

The Conservative Party under Thatcher adopted a modified form of “monetarism.” By restricting the money supply, inflation would be purged from the system. Responsibility would thereby be devolved back from government to individuals. In workers insisted on striking they would price themselves out of the job market. Managers capitulating to workers’ demands would go broke. Dynamic businesses, with workers put in their place, would prosper. With savings preserved, investment would be free to flow away from obsolete industries towards competitive new enterprises.

Thatcher’s steely tones — which won her the nickname “Iron Lady” from the Soviet Union — did not at first enthuse the electorate, who feared class warfare. Labour’s “Social Contract,” however, only held down the wages of poorly organized workers whilst preserving the power of heavily unionised workers able to defy wage-restraint. Corporatism no longer seemed to preserve social justice, never mind economic efficiency.

In 1979, the poorly-paid rebelled in a series of strikes that left the dead unburied and rubbish piling on the streets. This “Winter of Discontent” brought Thatcher support — in the 1979 general election, even one third of trade unionists voted for the Conservative Party — and left an indelible legend of anarchical decline that the Tories exploited for years afterwards.

Thatcher’s first term coincided with an international recession. Thatcher’s Gladstonian stringency magnified the devastation of Britain’s traditional industrial base. Unemployment rose to well over 3 million. Riots broke out in inner cities. Thatcher’s legacy was chronic under-employment with all the attendant social ills of poverty and dependence. To be sure, in all advanced countries, capitalism was deindustrialising, mass-production declining and low-skill jobs disappearing, with unavoidable social and political consequences. The victory of Margaret Thatcher’s Conservatives in 1979, Ronald Reagan’s Republicans in 1980, and Helmut Kohl’s Christian Democrats in 1982 were all of an epoch, as was the turn to market solutions by the socialist governments of Felipe González in Spain and François Mitterrand in France from 1982–3. It was the Communist Bloc’s attempt to shore up its industrial architecture that slipped it below the tide mark of viability. But it was the very abrasiveness of Thatcher’s determination to push through the pain-barrier, her vitriolic celebration of the market restructuring, that set her apart.

“Wets” pondered whether it would be advisable to U-turn, but Thatcher scorned these grandees of the civil service, Church of England, Oxbridge, the BBC, and the old Tory establishment. Too comfortably ensconced in their inherited privilege, they failed to see the need for hard choices and sacrifice. They lacked the petty bourgeois’ virtues. Thatcher always preferred the company of self-made businessmen from outside the charmed circles of British life — she was particularly warm to those of Jewish background. She did not consider the old ruling elites to be “one of us.” In a legendary 1980 speech, she firmly rebuffed these faint-hearted: “To those waiting with bated breath for that favorite media catchphrase, the U-turn, I have only one thing to say, you turn if you want to. The lady’s not for turning.” She would not be another Heath.

Thatcher’s first term was striking in her assault on the time-honored habits of consensus and fudge. Her mix of rhetoric and policy was, almost uniquely in British political history, dignified by an “-ism”: “Thatcherism” was coined by Nigel Lawson, future Chancellor of the Exchequer, in 1981.

The popularity of Thatcher’s government at first waned, but she was arguably saved by the invasion of the British-owned Falkland Islands by the Argentinian military junta in 1983, and their subsequent liberation by a British Task Force. The Task Force could quite easily have come to grief, and the cost in life on both sides was substantial, but Thatcher’s gamble paid off. The attendant burst of British national chauvinism chimed with her values and propelled her party up the polls.

Alan Budd, a Thatcher advisor, in 1992 recalled that monetarism was “a very, very good way to raise unemployment and raising unemployment was an extremely desirable way of reducing the strength of the working classes. So what was engineered there, in Marxist terms, was a crisis of capitalism which recreated a reserve army of labor and has allowed the capitalist to make high profits ever since.”

Thatcher also had a positive program, however. Council houses were sold off to their occupiers at discounted prices. As local authorities were not allowed to use the receipts to build new homes property values spiralled in a tightening market. The privatization of publicly owned industries was calculated to encourage widespread share-ownership. This was social engineering to political ends. As the London School of Economics academic Rodney Barker writes, “If each acre in the hands of the peasantry was another musket for the defence of property, it seemed as if each Telecom share passed down through the middle-class might be another vote for the defence of the New Right.” This was the prosperity of asset inflation rather than substantial productivity gains. There was no economic miracle.

Under the Thatcher governments, annual economic growth averaged 1.8 percent, a figure below that for the 1960s and 1970s and below the OECD average, in spite of the dividends from North Sea Oil. But there’s no doubt that Thatcher’s rhetoric of aspiration chimed with even working class voters, particularly given the parlous state of the opposition. In the 1987 general election, almost 50 percent of Conservative support came from the working class. Two-thirds of the skilled and 50 percent of the semi-skilled and unskilled working class voters declined to support Labour. Only half of the unemployed voters supported Labour. Anti-Tory voters, always a majority of the electorate in the Thatcher years, were fatally divided between opposition parties.

From 1983, the economy began to recover, and from 1987, as taxes were slashed, the economy boomed, though in a particularly unsustainable way. It was to collapse into severe recession in 1988. Even with the largesse of North Sea Oil, Britain was living beyond its means. An excessive prioritization of finance over manufacture, a deformation that has marked the economy ever since, was entrenched.

Still, as the economy recovered, Thatcher’s self-confidence grew. Anti-trade union laws were successively ratcheted up, and most of the nationalized industries were sold off. In 1984–5, she faced down miners in a year-long dispute over pit closures. Accelerated pit closures probably made little economic sense: a more paced run-down would have avoided the heavy burden placed on welfare resources by men precipitously thrown out of work in the country’s many one-industry towns. But the symbolic value of facing down the union that had humiliated the Tories in 1974 was too attractive to resist, particularly since it was led by the old-style radical socialist, Arthur Scargill. The political use of the police during the Miners’ strike, as a force of repression rather than even-handed enforcers of public order, was evidence enough that Thatcherite anti-statism had its limits.

The Conservatives handily won two further terms, in 1983 and 1987, against a demoralized and divided opposition. While most politicians are softened by a long period in office, Thatcher was radicalized. Sometimes her activist instinct led her in directions she later regretted. The 1985 Anglo-Irish Agreement, arrived at under the “shadow of the gunman” (as she put it in her memoirs), she later regretted as a concession to Irish disloyalists, all the more galling in that she had ruthlessly faced down the republican hunger strikers in 1981 and survived a serious assassination attempt by the IRA in 1984. She reverted to purely military measures against the IRA, and the peace process had to await her departure.

Thatcher was careful in her political handling of the welfare state and the National Health Service. By 1990 taxes as a share of GDP had actually increased compared to 1979 (from 35.5 percent to 37.5 percent) though the burden had been shifted from progressive income taxes to regressive taxes on consumption. Still, her long-term intentions were clear. Society had to be re-moralized, and this meant refocusing it from state-welfare to purposeful individuals providing for themselves and their families. As she famously put it in an interview:

I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” . . . and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then also to help look after our neighbour.

The re-moralization of British society was not evident, however. Instead escalating inequality and the gambling ethics of the stock-market wealthy promoted narrowly materialistic individualism, a vapid “loadsamoney” culture much at odds with Thatcher’s genuinely held “Victorian values.” Tory distress at the social consequences of vulgar consumerism took reactionary form, with demonization of single-parent families and discriminatory legislation against gays.

Internationally, Thatcher was a close ally to Reagan in America, but never a mere sycophant. She ignored American warmth for the anti-Communist Junta in Argentina during the Falklands Conflict, and she rebuked the US invasion of Grenada, a member of the British Commonwealth, in 1983. Trans-Atlantic solidarity was more a more obvious feature of the Thatcher years, however, reversing a long cooling of relations since Britain had stayed out of the Vietnam War. Thatcher fully supported Reagan’s “Second Cold War” and delighted in dismissing pacifist protests at the stationing of US nuclear missiles in Britain. When America bombed Libya in 1986 Thatcher allowed US warplanes to use Britain as a base. Gaddafi retaliated by supplying the IRA with Semtex explosives.

In Mikhail Gorbachev, Thatcher saw a leader struggling to move the Soviet Union beyond its economic and political reliance on a passive industrial working class. Intuitively, she felt that his attempts to incentivize a putative Soviet bourgeoisie, the technical intelligentsia and managerial strata, would open the road to capitalist restoration and Western victory in the Cold War. He was, she declared, a man the West could “do business with.” Only in her hostility to German reunification — Thatcher was of the Second World War generation, after all — was she out of step with the construction of George H. W. Bush’s “New World Order.”

Thatcher’s cumulative radicalization finally put an end to her long tenure in office. Her highest ambition was to restore civic responsibility at the local level. However, the progressive rates system meant that while local authority expenditure was decided democratically it was financed disproportionately by the rich. There was every incentive for the poor to elect high-spending councils who would pay for services by hitting the rich hard.

Thatcher, outraged by so-called “loony-left councils,” responded by emasculating local democracy, empowering unelected quangos and the central government, and imposing rate-caps. This was only a stop-gap, however. With her Community Charge — better known as the Poll Tax — she planned to restore responsibility to local electorates. The tax burden would be basically equalized for each individual voter, encouraging a sense of responsibility and due regard for sober economy in the polling booth.

Logical in theory, the Poll Tax demonstrated Thatcher’s departure from her previous sure touch for popular opinion. The idea that “the rich man in his castle, the poor man at his gate, shall each pay an equal rate” outraged people’s sense of natural justice. That the Poll Tax was rolled out first in Scotland added insult to injury, and the Tories were pushed to near extinction in the country. As the Poll Tax was introduced to England, it was met by mass non-payment — primarily organised by Militant, a radical group to the left of Labour — and, in March 1990, serious riots in London. Thatcher was now a liability to the Conservative Party, as the Poll Tax could not realistically be replaced while she remained prime minister. Labour was consistently ahead in the opinion polls.

Thatcher’s defenestration was occasioned by inter-Tory disputes over Europe. Thatcher cooperated with the European Community, but was never an enthusiast. She feared that left-wingers, defeated within their nation-states, were attempting to use the Community to bring in social democracy at a continental level. Jacques Delors, after all, a leading architect of the European single market, had been a minister in Mitterand’s left-Keynesian government in France.

On 1 November 1990, Deputy Prime Minister Geoffrey Howe resigned over Thatcher’s refusal to name a date for joining the Exchange Rate Mechanism, a precursor to the Euro. The next day Michael Heseltine, a populist Tory who had earlier resigned from the cabinet, challenged Thatcher for leadership of the party. Thatcher won the contest, but not by a secure majority. Rather than contest a second round, she was unwillingly persuaded by ministers to resign. She was replaced by John Major, who won the 1992 election but presided over a government of deflating authority and collapsing support.

Conservatism’s electoral appeal had historically rested primarily on popular confidence in the traditional elites. Thatcher’s cultural revolution had attacked this very governing caste and its institutions as complacent consensus builders presiding over British decline. Since the 1920s, there had been solid working-class bloc that preferred the Tory Party to Labour as a disinterested and experienced repository of expertise in goverance. But Thatcherism eroded the deference to natural authority that wed many working class voters to the propertied classes. Voters were less likely to vote for a Tory Party on the grounds of its historical competence in government after Thatcher had lambasted the failure of Britain’s hereditary leadership caste.

From the 1980s, Labour escaped its close association with “over-mighty” trade unions, now crushed by Thatcherism and de-industrialization. Thatcherism’s politics of acquisitiveness destroyed the lustre of an elite once seemingly committed to noblesse oblige and “one-nation” politics. Voting became instrumental, with a patina of sentimentality. New Labour was able to present itself as competent to deliver the free market goods, with just enough progressive rhetoric to assuage the guilt of voters demoralized by the rampant selfishness of the Thatcher years and John Major’s tawdry coda.

Thatcher resigned from the House of Commons in 1992. She was an often uncomfortable presence still for Tory leaders as she crafted her own legend of impregnable principle opposed to the compromises of lesser mortals. Her anti-Europeanism, always held in check while in office, grew apace thereafter, and tore at the entrails of the Conservative Party. John Major was overheard muttering imprecations against the Thatcherite “bastards” who dogged his steps. When Tony Blair came to power in the 1997 New Labour landslide, he invited Thatcher to Number 10, an act of fealty that sickened old Labour stalwarts who had seen their communities devastated in the 1980s.

Ill-health meant that Baroness Thatcher, as she now was, slipped into silence, but the Tories in opposition seemed sick with ideology, frantic to expatiate its betrayal of the “Iron Lady.” David Cameron from 2005 turned course, and rebranded the party by explicitly dumping parts of Thatcher’s legacy. He rejected her denial of “society” and spoke indeed of the need for a “Big Society”. This was not enough to restore the Tories as the “natural party of government” — Thatcher had destroyed that — but the Conservative-LibDem Coalition that came to power in 2010 proposed to continue Thatcher’s project by finally destroying the “culture of welfarism.”

Thatcher was perhaps made by her era more than she made it. But she was nonetheless an inescapable figure, the supreme emblem of her time. For the Right, she is part of the pantheon, only below Winston Churchill in the twentieth century. For the Left she personifies the triumph of the populist capitalism, and they must take her measure even when seeking to prove that, after all, there was and is an alternative.